Office of the Attorney General
State of Texas

Re: Whether Government Code section
824.304(c) conflicts with the federal Age
Discrimination in Employment Act of
1967, as amended by the Older Workers
Benefit Protection Act of 1990, and related
questions (RQ-371)

Dear Mr. Blevins:

You requested the attorney general's opinion concerning whether Government
Code section 824.304(c) conflicts with the federal Age Discrimination in Employment
Act of 1967 (the "act"), Pub. L. No. 90-202, 81 Stat. 602 (1967), as amended by the
Older Workers Benefit Protection Act, Pub. L. No. 101-433, 104 Stat. 978 (1990),
now codified at 29 U.S.C. §§ 621-34. We conclude that section 824.304(c) conflicts
with the federal acts and is therefore pre-empted by federal law and void.

Title 8, subtitle C of the Government Code created the Teachers Retirement
System of Texas (TRS) to establish a system of benefits for retired teachers and to
provide for administration and management of such a system. See Gov't Code
§§ 824.001-.701. The retirement benefits offered by the system are based on years of
teaching service. See Gov't Code §§ 824.202-.204. If a member of the system
becomes disabled, the member is entitled to a disability retirement annuity. Id.
§ 824.302. If a disability retiree is restored to active service, the disability retirement
annuity is discontinued and the retiree must again become a member of the retirement
system. Id. § 824.307. However, Government Code section 824.304(c) states the
following special provision applicable to TRS members older than 60 years: "If a
person receives a disability retirement annuity under Subsection (b) and the retirement
begins after or continues until the person becomes 60 years old, the disability is
conclusively presumed continuous for the rest of the person's life." Therefore, under
the present Government Code, a disabled member who cures his disability before the
age of 60 may return to active service and earn additional years of service credit toward
retirement; however, a disabled member who cures his disability after reaching the age
of 60 is conclusively presumed disabled for life, cannot revoke his disability, and
cannot earn additional years of service credit toward retirement.

In 1967 Congress passed the Age Discrimination in Employment Act (ADEA)
with the express intent "to promote employment of older persons based on their ability
rather than age [and] to prohibit arbitrary age discrimination in employment." 29
U.S.C. § 621(b). The ADEA declares:

It shall be unlawful for an employer

(1) to fail or refuse to hire or to discharge any individual or
otherwise discriminate against any individual with respect to his
compensation, terms, conditions, or privileges of employment,
because of such individual's age; [or]

(2) to limit, segregate, or classify his employees in any way
which would deprive or tend to deprive any individual of
employment opportunities or otherwise adversely affect his status
as an employee, because of such individual's age.

Id. § 623(a). The term "employer" includes "a State or political subdivision of a State
and any agency or instrumentality of a State or a political subdivision of a State." Id.
§ 630(b)(2). The act's prohibition against discrimination applies to individuals at least
40 years of age and less than 70 years of age. Id. § 631(a).

Despite the ADEA's broad prohibition against age discrimination, the Supreme
Court in Public Employees Retirement System of Ohio v. Betts, 492 U.S. 158 (1989)
held that the act prohibited age discrimination in hiring, firing, wages, and salary, but
did not prohibit discrimination in the furnishing of fringe benefits such as retirement or
pension packages. Congress then passed the Older Workers Benefit Protection Act of
1990 with the express intent of overturning Betts. Pub. L. No. 101-433, § 101, 104
Stat. 978 (1990); see also S. Rep. No. 101-263, 101st Cong., 2d Sess. 5, 14-19
(1990), reprinted in 1990 U.S.C.C.A.N. 1510, 1519-1524. The Senate Subcommittee
on Labor and the Senate Special Committee on Aging endorsed the amendments and
the overruling of Betts as follows:

Through this legislation, Congress intends to make unmistakably
clear that the ADEA's purpose of eliminating arbitrary age
discrimination in all employment includes the elimination of age
discrimination in all forms of employee benefits. It is little
consolation to an older worker to be protected from discriminatory
wage payments if an employer is free to discriminate based on age
in the broad range of employee benefits that are included as an
individual's compensation, benefits that often are valued between
one-quarter and one-third of earned wages.

S. Rep. No. 101-263 at 16-17, reprinted in 1990 U.S.C.C.A.N. at 1521-22. The 1990
amendments to the ADEA added the following new subsection to make it clear that
Congress intended to prohibit discrimination as to fringe benefits: "The term
`compensation, terms, conditions, or privileges of employment' encompasses all
employee benefits, including such benefits provided pursuant to a bona fide employee
benefit plan." Pub. L. No. 101-433, § 102, now codified at 29 U.S.C. § 630(L). The
amendments further provided that: "No . . . employee benefit plan or voluntary early
retirement incentive plan shall excuse the failure to hire any individual, and no such
employee benefit plan shall require or permit the involuntary retirement of any
individual specified by [this act], because of the age of such individual." Pub. L. No.
101-433, § 103, now codified at 29 U.S.C. § 623(f)(2).

The present Government Code allows a disabled TRS member who cures his
disability before the age of 60 to return to active service and earn additional years of
service credit towards retirement. See Gov't Code § 824.307. However, pursuant to
Government Code section 824.304(c), a disabled TRS member who cures his disability
after reaching the age of 60 is deemed disabled for life, cannot revoke his disability,
cannot rejoin the TRS system, and cannot earn additional years of service credit toward
retirement. We conclude that denying an individual older than 60 years old an
opportunity to rejoin the retirement system, while granting this same opportunity to one
younger than 60 years old, constitutes discrimination against an individual between the
ages of 60 and 70 years old "with respect to his compensation, terms, conditions, or
privileges of employment." This violates ADEA section 621(b)(1). See American
Ass'n of Retired Persons v. Farmers Group, 943 F.2d 996, 1001-02 (9th Cir. 1991)
(pension plan provisions denying accruals of service and salary credits to employees
over 65 years old violated ADEA, 29 U.S.C. § 623(a)(1)). We also conclude that this
disparity adversely affects the status of such employees older than 60 years solely
because of their age in violation of section 621(b)(2).

Under the Supremacy Clause of the United States Constitution, article VI,
clause 2, state law is pre-empted where the state law conflicts with federal law.
English v. General Electric Co., 496 U.S. 72, 110 S.Ct. 2270, 2275 (1990). "[T]he
[Supreme] Court has found pre-emption where it is impossible for a private party to
comply with both state and federal requirements or where state law `stands as an
obstacle to the accomplishment and execution of the full purposes and objectives of
Congress.'" Id. 110 S.Ct. at 2275. In the present case Government Code section
824.304(c) conflicts with the federal ADEA as amended; therefore, section 824.304(c)
is pre-empted by the federal act and is void. See Maryland v. Louisiana, 451 U.S.
725, 748 (1981) ("[A] state statute is void . . . to [the] extent that it conflicts with [a]
federal statute."); see also Attorney General Opinion DM-49 (1991) at 7.

SUMMARY

Texas Government Code section 824.304(c) conflicts with the
federal Age Discrimination in Employment Act of 1967, as
amended by the Older Workers Benefit Protection Act, codified at
title 29 of the United States Code sections 621-34, and therefore
section 824.304(c) is pre-empted by the federal acts and is void.

Very truly yours,

DAN MORALES
Attorney General of Texas

WILL PRYOR
First Assistant Attorney General

MARY KELLER
Deputy Assistant Attorney General

RENEA HICKS
Special Assistant Attorney General

MADELEINE B. JOHNSON
Chair, Opinion Committee

Prepared by Geoffrey Hennessey
Assistant Attorney General

Footnotes

1. In chapter 13, section 25(b) of the Special Acts of 1991, the Texas Legislature passed the
following amendment to section 824.304(c):

Section 824.304(c), Government Code, is repealed only if required by
federal law. The attorney general shall determine if the repeal is so required,
and shall enter a finding to that fact and publish the finding in the Texas
Register. That section is repealed only if the attorney general makes such a
finding before September 1, 1992.

We believe that the proper procedure for the repeal of section 824.304(c) is for the Texas
Legislature to pass a bill unconditionally and expressly repealing the former law. The Texas Constitution
reserves the power to repeal a law to the legislature in article I, section 28, which provides: "No power
of suspending laws in this State shall be exercised except by the Legislature." If the Texas Legislature
wishes to remove Government Code section 824.304(c) from the books, the legislature should pass a new
bill expressly doing so. Tex. Const. art. III, § 30. In the meantime and for the reasons previously
discussed, Government Code section 824.304(c) is pre-empted by federal law and is void.